India’s richest man Mukesh Ambani may soon be successful in listing his four-year-old telecom venture Jio in foreign exchanges thanks to the $12.5 billion (Rs 92,202 crore) funding the company has raised in a little over one and a half months from Facebook and other investors.
Within hours of Abu Dhabi's Mubadala announcing an investment of $1.2 billion in Jio, American private equity giant Silver Lake said they will invest another Rs 4,546 crore in the digital platform for a 0.93% stake. Silver Lake has a combined stake of 2.08% in Jio now.
The boutique of investments that Reliance Jio has received so far will not only reduce the burden of its net debt, but also make it consider a listing on exchanges such as the New York Stock Exchange (NYSE) or Nasdaq.
Analysts are looking at a Jio IPO listing sometime next year, which may quickly lead to a jump in its valuation to a $100-billion company and give existing investors more muscle.
"The second round of investment by US-based Silver Lake is particularly pointing towards its ambitions of a global IPO especially when we look at the kind of success the PE group had with Alibaba in 2014. More importantly, it brings Jio deep technology understanding incumbents and new-age industries like e-commerce and sharing economy," Sanchit Vir Gogia, CEO and Founder of Greyhound Research wrote in a note.
At a time when US-China tensions have shown no signs of slowing down and Chinese firms are looking for alternative markets, Jio is likely to pose an interesting alternative to US investors keen to tap India's rapidly-expanding internet market and the possibilities that a 1.5-billion-strong population offers.
However, the challenges coronavirus has posed to the Indian economy, especially with the steep fall in spending, means Jio might still have to wait before it is ready to woo Wall street investors.